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  • Finance 0

    Fiscal Policy Has Failed The U.S. Economy

    The story of the post-crisis economic period is simple: The housing boom left the household sector mired in a deep debt hole. This was further exacerbated by the leverage Wall Street added on top of the household sector’s debt. This left the banks and household sector needing a great deal of support. Since 2008 we’ve seen huge amounts of stimulus from the Federal Reserve and global Central Banks, but we’ve had trouble transitioning from the Balance Sheet Recession period of 2008-2012 to a more sustainable growth trajectory. Why has the recovery failed to accelerate?  I suspect a few things are going on here: We have relied too heavily ...
    On February 9, 2016 / By
  • Finance 0

    Stock Market: Flattened Out

    The Stock market is at do or die support. With the S&P 500 right at do-or-die support per this chart (absolutely critical, but not particularly strong support), I have done more flattening out after yesterday’s post noting a short cover of GS and a sale of TLT, each very profitable positions. I just don’t think it’s a market to be caught gazing at your successes in, unless you want to get your eyeballs ripped out. So shorts on the Pigs (KBE) and the Emerging Markets (via EEV) were also covered today, leaving two moderate and un-leveraged short positions open. As for the gold sector, I have gotten too many emails from people getting...
    On February 9, 2016 / By
  • Finance 0

    S&P 500 Snapshot: A Volatile Session Goes Nowhere (But Check Out Japan’s Nikkei)

    Before the US market opened, Japan’s Nikkei had posted a -5.40% plunge for the day. The Nikkei is in a bear market, down 22.9% from its interim high in late June of last year, and it has taken a dive of 8.2% since its central bank announced its negative interest on January 29th. And today its 10-year went negative. Interestingly enough, the popular financial press (aka CNBC) is reporting that the Fed has told US banks to include negative Treasury rates as a scenario in their stress tests. The S&P 500 plunged at the open, rallied into the green and then sold off in a couple of waves to its -1.00% intraday low shortly after the lunch...
    On February 9, 2016 / By
  • Finance 0

    Honors Even

    The gap down had set up for a big bearish move lower, but the collapse never appeared. Instead, lows held as support. On the flip side, an attempt at a rally couldn’t get off the ground, but markets were able to do enough to register a close above the open. The S&P closed with a spinning top below support. Watch for a strong ‘sell’ signal in the MACD as other technicals remain bearish.  The only positive is the strong relative performance against the Russell 2000. The Nasdaq experienced a big gap down yesterday, and today offered a brief move to test the gap. Bulls need a gap higher to leave what could be a very good bu...
    On February 9, 2016 / By
  • Finance 0

    Is Unemployment Really 19%? Your Tactical Asset Allocation Should Reflect Economic Reality

    Several weeks ago, a comment provider ripped into me for being a left-wing nut job. What did I do to draw his ire?I explained that the tapering of QE3 and the 0.25% rate hike bump – modest stimulus removal efforts on the surface – adversely impacted everything from currencies to commodities, sovereign credit to corporate credit, equity prices to equity valuation. Today, I am taking aim at the 4.9% – an endeavor that may spark angry comments about my right-wing wacko credentials. Who are “the 4.9%?” They do not represent an income bracket. Rather, 4.9% is the headline data point on unemployed Americans. At the risk of ruffling pol...
    On February 9, 2016 / By
  • Finance 0

    Gold: A Closer Look At The Potential ‘Cup And Handle’

    Here are the possible outcomes for the current ’rounded bottom’ for spot gold. If it has a retracement that successfully returns to set a new high for this leg of the market we will have a successful handle and the formation is activated. However, it is also possible that there will be little to no retracement, and that gold will pause, backing and filling its recent gains, and then break out higher.  This would be just a rounded bottom, with a similar measuring objective but a slightly lower probability and a greater risk of a later correction as weak hands are shaken out, most likely in March. Or it could just break down from h...
    On February 9, 2016 / By
  • Finance 0

    A Reliable Dividend Aristocrat For Any Economic Environment

    Clorox (CLX) has increased its dividend for nearly 40 straight years and owns some of the most well-known and recession-resistant consumer brands in the country. The company is a fraction of the size of P&G (PG) and has numerous growth opportunities to pursue over the coming years. While the stock might not be a bargain today, it shares many characteristics with some of the holdings in our Top 20 Dividend Stocks portfolio. Business Overview CLX started in 1913 with five people and one product in Clorox bleach. In fact, CLX remained a one-product company for its first 56 years. Today, the company has over 7,700 employees, sells its produc...
    On February 9, 2016 / By
  • Finance 0

    The Market And The Economy Diverge

    “Davidson” submits: Light Weight Vehicle Sales, Help Wanted Online, Household Employment, US Real GDP and PCE Trimmed Mean Inflation were reported this week. All continue to signal economic expansion. Yet, fears of major bankruptcies in the energy sector, collapse of oil based economies and even rampant fear of European bank failures early this week were media headlines as these economic reports were released. Early 2014 to early 2016 has been a period of ‘mind over matter’. It has been what has become of market psychology excessively skewing market prices. Investors witnessed extreme US$ strength as a select group of ‘hyper-inflati...
    On February 9, 2016 / By
  • Finance 0

    World Equity Market “Wealth” Crashes $6 Trillion Below 2007 Highs

    Global equity market investors have lost a stunning $16.5 trillion of their newfound CB-fueled “wealth” in the last six months. This has erased half of the gains from the 2011 lows (but of course leaves all the debt created still in place). However, what is perhaps more troubling given the unprecedented money-printing since the last crisis peak, is that global equity market “wealth” is now down 10% from its November 2007 prior highs. Trillions of money printed and debt created and equity “wealth” is now down $6 trillion from the 2007 highs… Put another way – your plan failed CBs!...
    On February 9, 2016 / By
  • Finance 0

    Coke Posts Refreshing Results

    The Coca-Cola Company (KO) is the world’s largest beverage company and is the leading producer and marketer of soft drinks. Along with Coca-Cola, recognized as the world’s best-known brand, The Coca-Cola Company markets four of the world’s top five soft drink brands, including diet Coke, Fanta and Sprite. Through the world’s largest distribution system, consumers in nearly 200 countries enjoy The Coca-Cola Company’s products at a rate of more than 1 billion servings each day. Beverage giant Coca-Cola posted a beat today, as their reported earnings for Q4 2015 topped consensus estimates by $0.01/share–analys...
    On February 9, 2016 / By